While it’s never too early to start our retirement planning, as investors we need to get the right path towards financial freedom. There’re some retirement planning mistakes that investors should avoid:

Not Having a Retirement Plan
This is the most common mistakes that investors make. After all, failing to plan is planning to fail. As investors, we should know about retirement goals and committed to regular savings goals. We also have to review asset allocation investment performance and total savings on a regular basis and make changes when necessary.

Not Understand Diversification
Do not put all your eggs in one basket and there is a good reason behind this saying. The main idea of diversification is to reduce risk. Investors should have 4-6 sources of retirement income without relying completely ion just one. By diversifying, retirees can avoid losing al their income if one of the sources of income loses value. Fund allocations for retirement can include EPRF, pensions, FD, unit trust investments, property investments and other sources.

Not Taking Inflation into Account
Inflation will slowly affect investor’s retirement fund and their purchasing power, and subsequently eat into their FD and EPF returns. Already, we can estimate the national inflation rate at 3% per annum. E.g a cup of coffee now costs almost 4 times more when compared to say 30 years ago. Although inflation is something we cannot control, what you can do is to save a higher amount for retirement, while always taking into account the inflation rate.

Not Saving Early Enough
Many people mistakenly believe they will have plenty of time for retirement planning. This is a common misconception, because when they are 20 years old, e.g they think retirement is 40 years off, so they wait until they are 30. And the same goes when they reach 30, 40 and so on. All the while they spend so much paying off mortgages and debts when suddenly, they realize that much time has been lost and their retirement savings is forever scarred. The more time you have until retirement, the easier the task is to achieve their retirement goals. Therefore, it’s never too early to start.